Gregory v. Hamilton

• Decision Date: 30 January 1978
• Citation: 77 Cal.App.3d 213,142 Cal.Rptr. 563
• Parties: Mariann GREGORY, Plaintiff and Appellant, v. Robert L. HAMILTON, Defendant and Respondent. Civ. 39961.
• Court: California Court of Appeals Court of Appeals

Page 563

142 Cal.Rptr. 563

77 Cal.App.3d 213

Mariann GREGORY, Plaintiff and Appellant, v. Robert L. HAMILTON, Defendant and Respondent.

Civ. 39961.

Court of Appeal, First District, Division 4, California.

Jan. 30, 1978.

Nagle, Vale, McDowall & Cotter, San Mateo, for defendant and respondent.

McGarry Law Offices by Francis T. Cornish, San Jose, for plaintiff and appellant.

ROTHENBERG, ^* Associate Justice.

This case involves the problem of the unsettled settlement. Plaintiff-appellant Mariann Gregory (hereafter appellant) appeals from an order of the Santa Clara County Superior Court, compelling enforcement of a compromise settlement and awarding her judgment against defendant-respondent (hereafter respondent) Robert L. Hamilton, in the sum of $7,500. ¹ The central issue in this case is the propriety of the court's order and entry of judgment in favor appellant pursuant to an oral compromise settlement which appellant claims was invalid.

FACTS

An action was filed by appellant and her mother, Frances Gallo, as the result of injuries sustained by them in an automobile accident which took place on August 12, 1971. The case was set for a mandatory settlement conference on June 5, 1975, and for trial on June 9, 1975. Both prior to and at the settlement conference, respondent's attorney offered to settle the case for $7,500 to appellant and $1,250 to Mrs. Gallo. At the conference, appellant's then attorney discussed the offer with her, but she rejected it. On the date set for trial, the case was assigned for further settlement conference. The parties and their attorneys proceeded to the judge's chambers for a final attempt at settlement. The offers were again made. After an extended discussion with the judge and counsel, both appellant and her mother apparently accepted the offers while in the judge's chambers; the matter was ordered off calender by the judge "as settled."

Several days afterwards, drafts of releases were sent by respondent's attorney to appellant's then attorney. Mrs. Gallo signed her release but appellant refused to sign hers.

On March 8, 1976, respondent filed a "notice of motion for order compelling enforcement of compromise settlement agreement and judgment thereon." The notice of motion stated it would be based upon the oral and documentary evidence to be presented upon the hearing of said motion; it was accompanied by an affidavit and points and authorities. Appellant, through her present attorneys, filed an opposition to the motion with accompanying declarations from appellant and her husband, who had been present at the conference. The opposition, filed March 22, 1976, was based upon lack of the attorney's authority and the client's unilateral mistake.

A hearing on the motion was held on March 24, 1976; respondent presented the testimony of the former attorney who testified that at various times on the morning of June 9, he had discussed the offers with appellant and her mother and recommended that they accept them. He stated that at the conference in the judge's chambers, appellant finally accepted the offer: "What words she used I don't know, but she agreed to settle the case at that figure, and there was no question in my mind or (the judge's) mind that that case was settled at that figure." He further stated that, although the parties had discussed the possibility that appellant would need future surgery, "I made it abundantly clear that the settlement reached that day would be unconditional." At the conclusion of this testimony, appellant's attorney requested, and was granted, a continuance to arrange for the testimony of appellant and her husband.

On May 19, 1976, the date for the continued hearing, appellant filed supplemental points and authorities raising the impropriety of the motion procedure; the stated ground of objection was that defense of compromise should be pleaded as a defense in the action pending. At the same time appellant filed a declaration by her doctor.

Appellant's testimony confirmed that offers were made at the conferences on June 5 and June 9, and that she rejected the June 5 offer. She denied that she discussed the settlement offer with her former attorney at any time on the morning of June 9, prior to meeting with the judge. She further testified that at the June 9 conference the judge told her that the settlement offer was a good one, that she should take the advice of her counsel, that she was not going to receive any more money and that "that would be the best offer." Her then attorney also told her to take the money. Appellant stated that she would "take the advice of my counsel." She testified that she was under medication that day in that she had taken empirin with codeine and valium, that her counsel never informed her that the offer was unconditional, and that she believed she had no choice but to accept the offer.

Following the hearing, and the filing of additional points and authorities, the matter was submitted. The trial court ordered that appellant be awarded judgment in the sum of $7,500 in accordance with the compromise agreement. Judgment was entered accordingly, and this appeal ensues.

DISCUSSION

A. Was the trial court's action in enforcing the compromise settlement by way of a motion improper?

Appellant's main contention is that the procedure employed by the trial court in the present case was improper and impermissible. She claims that the trial court had no authority to try the issue of whether there had been a compromise or settlement by way of motion; rather, the proper procedure would have been for respondent to "either bring a separate action on the settlement or apply for leave to file supplemental pleadings and plead the settlement as a defense to the original cause of action"

The "Motion for Order Compelling Enforcement of Compromise Settlement Agreement" is a "speaking motion," since affidavits were submitted and testimony taken. Appellant asserts that there is no precedent for the procedure employed herein, and urges reversal of the judgment with directions to place the action on the trial calendar. Respondent counters that the above motion was one of several alternatives available to him to enforce a settlement agreement, that California cases recognize the procedure here employed, and that employment of the methods suggested by appellant would have resulted in virtually the same proceedings.

No California cases have been discovered which expressly sanction the use of the procedure followed in this action.

In California, the methods which appear to be available to a defendant who wishes to enforce a compromise settlement are a separate action to compel enforcement of the agreement (see 12 Cal.Jur.3d, Compromise, Settlement, and Release, §§ 67-69), or interposition of the agreement as a special defense by way of supplemental pleadings. (Kreling v. Walsh (1947) 77 Cal.App.2d 821, 824, 176 P.2d 965; Booth v. Bond (1942)56 Cal.App.2d 153, 155-156, 132 P.2d 520.) The latter method appears especially favored, since under Code of Civil Procedure section 597, the defendant may have the court try the affirmative defense of compromise first, before proceeding to the merits of the action. ² . (Kreling, supra, 77 Cal.App.2d at p. 835, 176 P.2d 965; Booth, supra, 56 Cal.App.2d at pp. 156-157, 132 P.2d 520.)

However our courts do not regard the above procedures as inflexible. Thus in Silver v. Shemanski (1949) 89 Cal.App.2d 520, 201 P.2d 418, the validity of a compromise agreement was challenged by way of cross-complaint, not by way of special defense, in the main action. (Id., at pp. 527-528, 201 P.2d 418.) Upon cross-defendant's motion, the validity of the compromise was tried first, by an order regulating the order of proof, before trial on the merits of the action. The agreement was found to be effective and the entire action was ordered dismissed.

The problem with a motion procedure was discussed in Gardner v. Shreve (1949) 89 Cal.App.2d 804, 202 P.2d 322, a case not cited by either party. There, plaintiff moved for summary judgment on a claim of money; defendant countered with acceptance of a note in satisfaction. At a hearing on the motion, both plaintiff and defendant were called to testify on matters which were covered in the affidavits. At the end of the testimony, the judge announced that he was granting the motion. Defendant's counsel protested that there was a conflict in the evidence which defendant was entitled to have tried. The judge responded that "you have tried it here now. This Court can hear and decide a conflict on a motion like this." On appeal, plaintiffs contended that there had taken place a trial of special defense under Code of Civil Procedure section 597. The Court of Appeal, by dicta, rejected that claim in the following language: "As this court said in McCarthy v. Superior Court, 73 Cal.App.2d 943, 946-47, 167 P.2d 744, 746: 'That section is limited to cases where "the answer pleads that the action is barred by the statute of limitations, or by a prior judgment, or that another action is pending upon the same cause of action, or sets up any other defense not involving the merits of the plaintiff's cause of action but constituting a bar or ground of abatement to the prosecution thereof . . . ." In Booth v. Bond, 56 Cal.App.2d 153, 132 P.2d 520, the court concluded that the fact that the issues raised by the special defense involved the merits of the plaintiffs' cause of action did not prevent the trial in advance of those issues, in view of the power of the trial court which always existed to regulate the order of proof under section 2042, Code of Civil Procedure. But there is no necessity to pass on that question herein.' Even if separate trial under this section might have been permissible the record does not show that such a trial actually took place. It does not show a motion of either party for such trial nor an order of the court deciding such motion nor any step to set a trial...